Stripe vs. Balanced

I am quite interested in e-commerce and recently took a look at the capabilities of two cutting-edge payments platforms for e-commerce solutions. Specifically, Stripe and Balanced have taken note of the e-commerce marketplace model and offered a solution tailored towards that. I want to highlight the differences between the two marketplace offerings and share which I think is best.

Balanced

Used by many crowdfunding platforms and companies like Fancy, Balanced allows one to create a white-labeled payment processing platform for a marketplace that connects customers to multiple merchants through it's platform. Fancy is a great example because it is simply a curator that connects the customer to it's high-end merchants on it's platform and takes a fee for enabling such a service. What Balanced does is allow the marketplace to process the payment, put the money into an escrow account, and then either automatically or manually pay it's respective merchants, net of a commission to the marketplace. It also allows you to have the flexibility to decide whether to charge Balanced's payment processing fees to the merchant or to the marketplace itself. The one drawback to this solution is that it puts the liability of refunds and fraudulent charges on the marketplace, making the model a little less appealing as it would simply like to be an affiliate touchpoint with no liability. That being said, the marketplace is still free to negotiate a contract with it's merchant that passes the liability onward and Balanced even allows one to be able to credit or debit it's merchant accounts in these scenarios.

Stripe / Stripe Connect

Stripe, having realized that Balanced was getting some serious traction with this product offering, launched a competing offering, Stripe Connect, as a complement to it's traditional business of allowing merchants to easily process payments. In Stripe's scenario, however, the marketplace is viewed as a strategic partner that brings new merchants to Stripe. As a result, the marketplace is not charged anything, Stripe holds all funds, and releases them to the merchant when certain criteria have been met. The merchant is charged Stripe's standard transaction fees and the marketplace simply pockets it's share. In this scenario, however, each merchant would be required to sign up for a Stripe account, while at Balanced, the marketplace could simply pass some account information to Balanced and Balanced could send money to the merchant without the merchant ever having to interact with Balanced at all. Finally, Stripe takes 7 days to transfer money to the merchant and marketplace, while Balanced takes only 1 day.

Looking at the two solutions, the main differences are time to receive money, burden of fees, and ease of integration for merchant. Balance allows cash flow management to be easier by getting you your money faster, it also provides increased flexibility if you wanted to absorb the fees instead of the merchant, and it allows you to integrate the merchant without them having to make any additional effort. As a result, while Stripe Connect is an appealing new offering that is definitely bound to change, for the e-commerce marketplace model that simply hopes to match buyer and seller and let the transaction live on it's platform, it seems to me that Balanced is the better option.